The most effective way to bring businesses and workers out in the open is to leave them alone.

Economic freedom is the key to reducing shadow economics.

Reduced, if only figuratively, to shaking the dust from their piggy banks, government financial types from California to Cardiff have turned their eyes to that ever-elusive dream: Dragging those who have fled into the shadow economy back out into the open where they can be induced to keep the machinery of the state running just a little bit longer. Is there enough money out there to merit the taxman's interest? Almost certainly; California officials are salivating over the prospect of $7 billion in revenue, while the European Commission estimates that €2 trillion is hiding out there. Can the taxman actually collect any of that money? Well ... That's another question entirely. Left largely unasked by government officials, though, is this: Why have so many of their subjects chosen to operate in the shadows, forsaking the protections of legal status and effectively painting large targets on their backs? Could governments be chasing away the objects of their interest with excessive attention?

First of all, what do we mean by "shadow economy"? Are we talking hookers and blow? Black market plutonium? Human organs illegally harvested from nightclubbers left abandoned in tubs of ice in Newark motels? Not at all—that's all separate and in addition to the shadow sector. Friedrich Schneider, chair of the Department of Economics at Johannes Kepler Universitat in Linz-Auhof, Austria, and one of the world's foremost experts on "shadow" economic activity, put forward his widely accepted definition of such activity in a 2010 paper for the World Bank co-authored with Andreas Buehn and Claudio E. Montenegro:

[T]he shadow economy includes all market-based legal production of goods and services that are deliberately concealed from public authorities for any of the following reasons:

(1) to avoid payment of income, value added or other taxes,

(2) to avoid payment of social security contributions,

(3) to avoid having to meet certain legal labor market standards, such as minimum wages, maximum working hours, safety standards, etc., and

(4) to avoid complying with certain administrative procedures, such as completing statistical questionnaires or other administrative forms.

Say Schneider and his associates, "the overall tax and social security contribution burdens are among the main causes for the existence of the shadow economy." They also note that "[i]ncreased intensity of regulations is another important factor that reduces the freedom of choice for individuals engaged in the official economy" and they cite research by others concluding that "every available measure of regulation is significantly correlated with the share of the unofficial economy."

Writing in a widely cited Journal of Public Economics paper (PDF) in 2000, Eric Friedman, Simon Johnson, Daniel Kaufman and Pablo Zoido-Lobaton didn't quite agree. They believed that "relatively uncorrupt governments can sustain high tax rates," tolerated by business people and workers alike who appreciate being otherwise left alone, but that "when faced with onerous bureaucracy, high levels of corruption, and a weak legal system, businesses hide their activities 'underground'."

By either theory, if government officials want to keep business activity in sight where it can be taxed atany level, they have to learn to leave it largely unmolested.

If that's so, countries with handsy governments that can't keep their paws off the productive sector should have bigger shadow economies than countries with governments that mind their manners. As it turns out, that's largely true. To get an idea of what that means in as fair a comparison as possible, let's look at recent figures for 21 "highly developed" members of the Organization for Economic Cooperation and Development and compare their shadow economies as a percentage of their GDPs in 2007 (PDF).

Australia: 10.7

New Zealand: 9.8

Switzerland: 8.2

*

Canada: 12.6

Ireland: 12.7

United States: 7.2

Denmark: 14.8

United Kingdom: 10.6

The Netherlands: 10.1

Finland: 14.5

Sweden: 15.6

Japan: 9.0

Germany: 14.6

Austria: 9.4

**

Spain: 19.3

Belgium: 18.3

Norway: 15.4

France: 11.8

Portugal: 19.2

***

Italy: 22.3

Greece: 25.1

So you see ... Wait a minute ... That's not alphabetical! What kind of wacky ordering system is that? Oh, that's right—the countries are listed in the order of their ranking in the 2012 Index of Economic Freedom. The top three countries are ranked "Free," the countries between one star and two stars are "Mostly Free," and those between two stars and three stars are "Moderately Free." Italy and Greece are "Mostly Unfree" dumps—dumps with delicious food, yes, but authoritarian dumps where, as the Heritage Foundation, which sponsors the Index, says of Italy, "the foundations of economic freedom remain weak in the absence of an efficient judicial framework to provide effective and timely resolution of cases. Corruption, often involving government officials, is a growing concern, severely undercutting confidence in the government." As for Greece, "[t]he overall regulatory framework is hampered by government bureaucracy, and efforts to enhance the business environment have been sporadic at best."

By contrast, "Australia’s regulatory environment is one of the most reliable, transparent, and efficient in the world, offering a high degree of certainty for business planning." In New Zealand, "The top income tax rate is 33 percent, and the top corporate tax rate has been cut to 28 percent.... Start-up companies enjoy great flexibility under licensing and other regulatory frameworks. With no minimum capital required for launching a company, it takes only one day to start a business."

Among the "Free" and "Mostly Free" countries above, the average size of the shadow economy is 11.4 percent. The average size of the shadow economy for "Moderately Free" and "Mostly Unfree" countries is 18.8 percent. Allowing for cultural differences and country-by-country oddities in tax rates, corruption, and regulation, that's a pretty strong correlation between economic freedom and smaller shadow economies, on the one hand and the lack thereof fueling larger shadow economies on the other.

So, as government officials around the world try to figure out the most effective way to bring businesses and workers out in the open, the best advice may be the simplest: Leave them alone.

You talk about high taxes as if you know what that means. Unless the taxes are so high they a confiscatory, you can't just make the assumption they are too high, at least you can't make that assumption for anyone but yourself.

Most people in society don't want to pay taxes; yet, most are also unwilling to give up the things that taxes pay for, national security, law enforcement, social programs, etc. You have social, cultural, ethnic, and even religious factors that can affect how a person or group of persons might view the level of taxes and what they are used for. I suspect a Swede in Sweden might have a very different opinion from some Swedish farmer in Idaho about how high is high when it come to taxes.

You seem to be trying to make a distinction between illegal activity and not paying taxes because they are 'too high'; but, in any society not paying your taxes is an illegal activity.

The Department of Education has for instance increased the literacy rate in the country dramatically. Democracy don't work without every fool having an education.

And it is absolutely necessary that I have to buy an environmental impact statement for my wheat field, which has sat there just as it is being farmed for over 100 years.

And Chicago and Detroit need those cops - I mean they do - to take a bite out of crime, where living is more dangerous than in Afghanistan.

Got to contribute. I've paid highway taxes at the county level for years, and the last 7 or 8 as the property tax hasn't been coming in at the level to which they have grown accustomed they haven't plowed my dirt track in all that time. I'm thinking about seeing if I can close it off on the grounds they have abandoned it. It's a road nobody needs, except the kids who drink out there, and poach.

You ramble on like Maxine and don't make a point. By illegal activity I mean running drugs, counterfeiting and stuff. Breaking patents and so forth. Running fraudulent enterprises like palm reading, numerology and such perhaps.

I think you are right. Some pussy whipped Swede in Sweden, nannied from cradle to grave, probably has different ideas on taxes than I do, at least the ones that don't pay any taxes.

I thought the topic was what drives economic activity underground. Again, what else but illegality or high taxes, which are defined not by Laffer, but by those very people who say fuck it and who go underground with their activities. So give me another 'metric', fancy word, as to what drives economic activity underground.

On an important subject, have you ever heard of one Scott Weiland? My daughter is going to his concert on the riverbank tomorrow night, and I've never heard of the guy, of course.

I thought the topic was what drives economic activity underground. Again, what else but illegality or high taxes, which are defined not by Laffer, but by those very people who say fuck it and who go underground with their activities. So give me another 'metric', fancy word, as to what drives economic activity underground.

Fancy word? I'll give you three fancy words, the first two from Dictionary.com and the third in popular use more and more these days and defined here by Quirkopedia.

1. society [suh-sahy-i-tee]

noun

"a highly structured system of human organization for large-scale community living that normally furnishes protection, continuity, security, and a national identity for its members: i.e. American society."

2. republic [ri-puhb-lik]

noun

"a state in which the supreme power rests in the body of citizens entitled to vote and is exercised by representatives chosen directly or indirectly by them."

3. bankster [bang-stir]

noun

"a member of a group of powerful pricks who ignore their fiduciary responsibility and try to game the system to their own advantage."

Oh, you can offer up all kind of excuses and justifications (more precisely, rationalizations), however, the only differences between a person that cheats on their taxes, especially in a democratic society set up on the republican model, and the banksters caught in the recent libor fixing scandal is that the tax cheat is usually a crook on a smaller scale and that he will likely be prosecuted if caught whereas that is not the case for the bankster.

A "person who takes their activities underground", talk about euphemisms, is a crook, just like a bankster, someone from Wall Street who engages in insider trading, or someone who cheats on Medicare. That, despite what Mark Twain might say on the subject.

There is a moral principle, accepted by many religious institutions, that posits that if a man hasn't any money and steals some bread to feed himself and his family, it is not a sin. Obviously, it is still a crime but it is justified on moral grounds because it results in a greater good or in other words causes less harm than inaction.

That being said, I doubt the majority of people we are talking about are starving. And it certainly doesn't justify or is in any way comparible to the fat farmer who complains about paying taxes on the land he inherited or whose primary fiscal problem is paying for expensive tack for his daughter's pet horse.

I don't know what hell you are talking about. The question was what drives an economy underground, not my weight, how much I paid my relatives for some dog farmland, or how much money my daughter has made on her own account trading tack around on the internet. And what's this talk of religious institutions doing fancy theology to justify theft when any fool can see the situation (called situational ethics) of feeding one's starving family by stealing a chicken from someone else, whose family may then starve for lack of a chicken.

Likewise, there is another anomoly from the chart above that stands out immediately. To hear the GOP talk, the US is the most over-taxed, highly regulated country in the world; yet, it also has the lowest percentage of 'underground activities' on the chart.

"a highly structured system of human organization for large-scale community living that normally furnishes protection, continuity, security, and a national identity for its members: i.e. American society."

As found in Detroit maybe.

Anyway this is a really dumb definition of society as it starts off on the wrong foot by sticking that large-scale stuff in there, not to mention highly-structured whatever that is supposed to mean (not provided).

I'd suggest as another metric a situation which has become so dysfunctional that the members of the grouping no longer are cognizant of any difference between above ground and underground and have never heard of the idea of a normal economy at all.

Panhandling without a permit - put that in some of your new metric and smoke it. This dude goes underground economy. Why? Some religious authorities might say he is committing the sin of uncharity by not giving some of what he has 'earned' begging to other poor beggars who have not begged so well.

But it is an example I'd think of an over regulated society, when you need a permit to beg. And, where are you going to get the money for a begging permit if you have no money and need to beg to get the money for the begging permit?

Soon, you will be reduced to stealing chickens to feed oneself and ones starving family.

OKLAHOMA CITY -

A man arrested on suspicion of panhandling in Oklahoma City told officers there was no point in getting a job, because he made "$60,000" last year.

According to the police report, an officer spotted Shane Warren Speegle, 45, panhandling near Interstate 40 and Macarthur Boulevard earlier this month.

When the officer approached Speegle and told him it was illegal to panhandle without a permit, Speegle asked if he could get a permit that day and implied the $200 fee was not a bad price.

According to the report, the officer asked Speegle why he didn't just get a job and Speegle replied, "I'm lazy, and I made $60,000 doing this last year. Why would I go get a job?"

The officer told Speegle without a permit and an insurance policy he could not panhandle and gave him a warning to leave, but 20 minutes later the officer reported again seeing Speegle panhandle in the same spot.

Speegle was arrested on a complaint of soliciting from the street and taken to the Oklahoma County jail.

Quirk would no doubt call this a part of ""a highly structured system of human organization for large-scale community living that normally furnishes protection, continuity, security, and a national identity for its members: i.e. American society."

The policy makers who passed these requirements are the true beggars, always begging for more money in any scheming way they can, the beggars.

Whole thing makes one want to say fuck it and go underground. The permit fee probably goes to the Police Retirement Fund.

and take a look at the poor beggar, who would fit right in with Ash at the Country Club, or on the yacht, if he just went to Goodwill and bought some new used clothes.

With more 'take home pay' than most of us, he probably collects unemployment too and has access to 'the best medical system in the world' via the emergency room, and is nearing the point of being in the 1% what with all the benefits he can derive.

What's not to like? He is 'following his bliss' and living 'life, liberty, and the pursuit of happiness', living the American Dream!

I'll bet he doesn't drink his wine out of a paper sack.

Who knows, he might even have a 'night job' at SoulsRUs for when darkness descends panhandling becomes difficult.

To be expected, Bob attempts to justify, nay make a hero of, a lazy sod whose sole accomplishment is sucking off the tete of society like some parasitic remora gorging himself on the detritus of the big boy shark. The only difference, the remora at least provides some symbionic advantage to the shark.

What kind of dufus mispells words while in the process of criticizing someone else's spelling. Especially, when the dufus takes pains to point out that others are illiterate for not being aware of the "Kon-Tete".

He reminds me of Allen who when he ran out of actual arguments on a subject stuped to criticizing spelling or grammar and even in that was often wrong, or like Bob, committed the same sins he criticized.

You seem to be trying to make a distinction between illegal activity and not paying taxes because they are 'too high'; but, in any society not paying your taxes is an illegal activity.

I have not been challenging your reasons for people going underground although there are obviously other reasons such as the guy trying to hide assets from his wife or someone else, or the Libertarian who on principle thinks any tax is illegal, any regulation is too much regulation, and that no state has the right to infringe on the prerogatives of the individual, or as you just pointed out, the bum who decides $200 is too big a price to pay for the privilege of sitting on your ass all day and collecting $60 grand a year. What I did challenge was the distinction you seemed to be drawing between "illegal activity" and someone who goes 'underground' because he thinks taxes are too high.

The point I've made right along is that there is no distinction, except possibly in degree. They are all crooks.

As for the rest of your rant, all I can say is, Bob, you poor besotted hick. You have got to get a grip. You seem to be losing it.

While in the example of the man who steals a loaf of bread to feed his starving children, I offered up one possible moral justification for a crime, I was still careful to state that the act was still in fact a crime. You then, after denouncing that example, go on to justify a ludicrous example of your own, the bum who doesn't see the point in getting a job because in his own words, "I'm lazy, and I made $60,000 doing this last year. Why would I go get a job?"

The lazy, shiftless bum who makes $60,000 a year sitting on his ass but is too cheap to spend $200 for a permit to continue sitting on his lazy, shiftless ass and collecting $60 grand, $60 grand, about 50% above the median income of average Americans who bust their butt for 40-60 hours a week. You offer this dick up as some kind of American anti-hero who still embodies the proud tradition of individualism and is justified in joining the underground economy.

And rather than decry the bum for the lazy shiftless shit he is, you offer up this bit of wisdom "And, where are you going to get the money for a begging permit if you have no money and need to beg to get the money for the begging permit?" $60,000 a year. $200 permit. Lord, you have become unglued. Out smoking alfalfa or something?

You are some kind of hopeless.

You offer up that he whole "thing makes one want to say fuck it and go underground." Sounds appropriate to me. You already exhibit the other qualities of the troglodyte.

I must have a running dog in this fighting hunt. I fresh back from Chloe's Mezze Lounge in Denver and no wait in line as they no regular guys like me. Chloe is where you go to be dressed so as to impress. Everyone at Chloe’s are "Liberals" like yourself are sycophantic feminist bitch boys who piss sitting down and tuck your balls so you can be "progressive" like those hipster faggots on tv. I have to go now.

Hey, sycophantic feminist bitch boy who piss sitting down and tucks your balls so you can be "progressive" like those hipster faggots on tv, read this and snark --Michelle Malkin takes on the big liberal banking bastards, which you won't know about and get on your TV which you watch and your Detroit News which you read cause -

"The New York Times admitted this week that their staff and other political journalists from every major media outlet submit their work to the White House for unprecedented review, editing and "veto power."

So read up and try to think you stewed prune or I will tickle your catastrophe.

Don't worry, Bob, you will still be able to continue getting one side of the story (or at least one side of ancient history) from Michelle Malkin, on her blog or the American Thinker or Mad Magazine or the Sunday funnies. Though why you would want to is beyond me.

In the article you posted she has to go back to the 90's (the latest reference I noted was in 2008) to dig up dirt on the Dems. Good lord, if she was competent she could have offered much more recent examples, the libor scandal, Geitner's role in it, the failure of Dodd-Frank, etc., etc., etc.

The Dems are dicks. Surprise. Surprise. I've never denied it.

But then so are the GOP (and I could cite examples much more current than 2008). Likewise, so are all the kool-aid drinkers like Malkin and those who soak up her garbage.

Today I invite you to join me in celebrating the Birthday of a great American writer, born the same year as a beloved aunt, who compared his own writing to an iceberg and once said of bankruptcy, in what we may take as a warning to our dear country at this perilous time:

"You go broke slowly, then all at once."

“Best of all he loved the fallThe leaves yellow on the cottonwoodsLeaves floating on the trout streamsAnd above the hillsThe high blue windless skiesNow he will be a part of them forever.”

Buried in his and my beloved Idaho, he wrote this about a young boy whom he befriended and with whom he fished that had fought and died of leukemia.

From we to thee Ernie, pagan with a Christian conscience, we recall your Happy Birthday with gratitude.

Notice that boob does not deny that his hero, Ernie, supported Communists in both Spain and Cuba.That Ernie is a hero of the Communist revolution, in Cuba.

Does not deny that his family is a multi-generational beneficiary of Federal largess.

That he does not like being reminded of it, true enough.

His family, they did not do it alone, no, the Federals were with 'em every step of the way.From the granting of the public lands to price supports for the crops.Even providing Federal funding for Farm agents to deliver scientific ag advice as to fertilizers and seed.

If the Joker had taken one in the chest, even with the vest, he'd have gone down. The police were there in 90 seconds, according tp reports.

Perhaps half of those casualties "could" have been avoided, maybe even more, if the shooter had been shot, rather than walking out on his own timeline. The results could hardly have been worse, than the reality of the one sided gunfight. A fight were one side brought popcorn and the other lead.

The people in that internet cafe would probably agree. The people on every plane that was commandeered by the Saudi terrorists would have had a fighting chance if one passenger or crew member was armed. Any teacher carrying at the U. of V. would have had a chance to shut the killing down as well as one armed citizen could have stopped the shooting of 84 young people on an island in Norway.

A little suppressive fire isn't a good thing if folk are caught in the crossfire. The odds would be pretty damn low that you could get a good clean shot in the turmoil of hundreds in a darkened smoke filled theater (wasn't the guy tossing stuff like tear gas) and he had a shot-gun, a rifle with a 100 shot magazine, and ...

No, if anyone started shooting back at him chances are there would be more wounded and dead. Heck, by Rat's account the cops (with guns) were there in 90 secs and he'd left around then. I haven't followed the story too closely but they didn't fire any shots either (they'd be trained not to shoot unless they had a clean shot) and the guy was busted getting into a car wasn't he?

More wounded and dead? You have no way of knowing that. The perp was walking around shooting people like ducks in a barrel. Hard for him to miss under those circumstances. However, if there were lead coming towards him from the opposite direction, I can easily imagine a case where his aim might be off a little.

Of course it is speculation Quirk as is the fantasy that more armed folk in a crowded dark theater would have stopped this guy.

From what I've ready he had full body armor on, his prime weapon being a semi-automatic rifle with a 100 round magazine. He bought a ticket, propped open an exit door, got his stuff on, re-entered tossed a few smoke grenades and started shooting folk for a couple of minutes. Even a manly man like our host with his rod in his man purse would have a hard time countering that threat much less 6 or 8 normal panic stricken folk packing heat firing wildly back in the mayhem. Like I said - it is a fantasy solution wishing that more guns added to mix would do anything of value in a situation like that. The odds are the casualties would be higher.

As I said, mere speculation. You have no way of calculating the odds that casualties would be higher. Neither do I and neither would the shooter.

I haven't been really following this story that closely so what follows is merely speculation on my part, kind of a thought game. Besides you know the joy I take in arguing with anyone, especially you.

:)

Never been in a situation like that so my opinion is merely based on what I have read. First, I would discount the size of the magazine. A large magazine might be helpful as you go casually walking around a theater picking off women and 6 year old little girls but in direct confrontation with an opponent at the distances we are talking most police would say if you don't get the guy in the first three shots you are unlikely to get him.

Likewise, with the body armor. I recently read an FBI report on handgun wounding factors. It pretty much blew away the idea of immediate incapacitation by a handgun round with the exception of those causing damage to the brain or the upper spinal cord. Due to the 'flight or fight' response a person can have his heart destroyed and still function for 10-15 seconds.

While it did not rule out immediate incapacitation from other wounds, it indicated the incapacitation was due more to psychological rather than physiological reason and, therefore, that it's unpredictable. You just never know how any unique individual would respond.

It's the psychological factors I would be counting on most.

You say that the shooter came in through one of the side doors; therefore, there was no one behind or to the side of him when he began his attack thus limiting the amount of casualties around him caused by return fire. It would get more complicated as he moved towards the crowd. However, reports stated he got within 5 feet of some of his victims. At that distance, he would be hard to miss by even a poor shot. Having a rifle, he would have a distinct advantage over an opponent with a handgun but the advantage would be considerably smaller than when facing a defenseless 6 years old.

At the close distances involved, the chances of him being hit, even critically hit, increase. Likewise, unless the crowd filled in around the shooter, the odds of additional casualties would be unlikely to go up.

The interesting part would be if the shooter was hit by returned fire, whether by luck or marksmanship. Despite the armor, there is the chance he could take a critical hit. Likewise, it is unpredictable what his reaction would be if he took a wound in one of his extremities or lead started pounding into his body armor. You saw the reaction of those two thugs in Deuce's video when they were surprised when that old geezer started popping rounds at them. At a minimum, the confusion and panic wouldn't be limited to those 'panic stricken folk' you talked about above. It's unlikely he would have been able to maintain the same accuracy he previously displayed as he casually walked about methodically shooting people for, as you put it, a couple of minutes.

By the way, that old geezer in the video might have been a piss-poor shot but he sure didn't look very panic stricken to me.

Once the lead started flying, the shooter could have withdrawn, been incapacitated by return fire, or continued to return fire. The odds of additional casualties caused by the shooter wouldn't go up. If anything they would go down. He was already shooting as many people as he could with no distraction. Now he would be in the middle of a gunfight and his accuracy would likely go down.

Since the shooter would be moving from one end of the theater towards the crowd, I think your estimate of the number of people caught in a crossfire is speculative if not highly inflated.

Bottom line, you are merely guessing as am I. Given the uncertainty, I would still prefer to be sitting there with a handgun than not.

It would have been nice if there were people in the audiance given the option. I haven't been following this closely, but I heard initial reports that said he was within five feet of some of the crowd.

Hard to miss at that range. And if you have a larger caliber weapon, less chance of it passing through the perp and hitting someone else.

There are always going to be nutjobs like this guy walking around. You never know when you will run into one. You never know what will happen but I would rather take my chances being armed than not.

Illinois’ 23 largest wind farms will add $5.8 billion to local economies and result in the creation of more than 19,000 jobs over their useful lives, according to an Illinois State University Center for Renewable Energy study released this past week. The results provide additional fuel for US wind industry participants and supporters lobbying Congress to extend a key renewable energy subsidiy: the wind energy production tax credit or PTC.Clean Technica (http://s.tt/1iuyd)

Magnificent Ronald and the Founding Fathers of al Qaeda

“These gentlemen are the moral equivalents of America’s founding fathers.” — Ronald Reagan while introducing the Mujahideen leaders to media on the White house lawns (1985). During Reagan’s 8 years in power, the CIA secretly sent billions of dollars of military aid to the mujahedeen in Afghanistan in a US-supported jihad against the Soviet Union. We repeated the insanity with ISIS against Syria.